Truth revealing market equilibrium

ABSTRACT

To use market clearing methods to determine market equilibrium, a market clearing situation is established by determining a number of items to be sold at the market price and allotting a number of pseudo items assignable to bids below the market price. Once bids are received for the items, using the number of pseudo items and the actual items as the supply side, and the total funds bid as the demand side, a market clearing price is determinable using a market clearing equilibrium model. Funds assigned to pseudo items are returned or not charged. Further, by selling items only to bids exceeding the market clearing price, such as by setting the market price incrementally above the market clearing price, bidders are encouraged to submit bid prices bid reflecting what the items are worth to them instead of attempting to bid strategically to guess or set the market price.

BACKGROUND

It is a basic axiom of microeconomic theory that the ideal market pricefor a good or service should be set at the market equilibrium pointwhere demand is equal to supply. Unfortunately, just as microeconomictheory is difficult to apply in most real world situations, determininga market price based on market equilibrium point presents a difficultproblem.

One example of a difficult case for determining an appropriate marketprice based on market equilibrium data is the sale of Internetadvertising opportunities. Internet search engines, web-based mail,on-line reference sources, television programming guides, and providersof similar services earn revenue by presenting selectable advertisementsover networks. The ads may be directed to any persons who might use theservice, or the ads may be targeted to those whose on-line activitiesindicate interest in a particular type of good or service.

For example, FIG. 1 shows a search engine web page 100 that allows aperson to perform a web search. To initiate the search, the personenters a search 102, consisting of one or more search terms, in a searchfield 104. The person then selects or “clicks” on a search button 106 bydirecting a pointing device (not shown) to position a cursor 108 overthe search button 104 and pressing a button on the pointing device. Inthis example, the user performs a search 102 consisting of the term“Camera.”

As shown in FIG. 2, the search engine returns a results screen 200listing links 202 to web pages relevant to the search 102. The links 202are presented and ranked according to their relevance to the search 102.In addition to the links 202, the results screen 200 also includes anumber of sponsored links 204-208. The sponsored links 204-208 representlinks to sellers or goods of services related to cameras. Unlike thelinks 202 that are presented because of their particular relevance tothe search 102, the sponsored links 204-208 are presented becauseadvertisers paid for the links to be presented. In addition to sponsoredlinks, the provider of the search engine also may present banner ads(not shown) across the search screen 100 (FIG. 1) and the results screen200, as well as pop-up ads that are presented in separate windowspresented over the screens 100 and 200.

If the user wants to learn more about or purchase what is described inone of the sponsored links 204-208, the user positions a cursor 210 overthe link and selects it. The likelihood of the user selecting an adincreases if the ad concerns a good or service of interest to the user.Thus, it is not a coincidence that the results screen 200 for the user'ssearch 102 on the term “Camera” presented sponsored links 204-208representing advertisers who deal in goods or services pertaining tocameras. An advertiser arranges with service providers for its ads to bepresented when a user shows an interest in the advertiser's business by,for example, performing a search including one or more search termsrelevant to its business. In this case, the sponsored links 204-208 aresold to advertisers who have paid to have their links presented when thework “camera” is used within a search 102. Advertisers agree to pay thesearch engine provider either each time one of the advertiser's adseither is presented, or each time one of the advertiser's ads isselected or “clicked” by a user.

Typically, the advertising opportunities, such as the sponsored links204-208, are sold to advertisers by auction. Advertisers submit bids foradvertising opportunities that arise, for example, when a user performsa search including one or more terms describing the advertiser'sbusiness. The advertisers' bids include a bid price and an auctionbudget. The bid price specifies a maximum price an advertiser is willingto pay for an advertising opportunity, and the auction budget specifiesa total sum of money the advertiser is willing to spend on ads in aparticular auction.

In the case of a results page 200 including multiple advertisingopportunities in the form of sponsored links 204-208, multipleadvertising opportunities are auctioned for each results page. Withinthe list of sponsored links 204-208, links listed higher in the list aremore likely to be selected. Thus, the advertiser offering the highestbidder for the search term “camera” will win the advertising opportunityof sponsored link 204, a next highest bidder will win the advertisingopportunity of sponsored link 206, and a third highest bidder will winthe advertising opportunity of sponsored link 208. Other lower bidderswill not win advertising opportunities.

Auctioning advertising opportunities according to such conventionalmeans may lead to a number of undesirable results for advertisers.First, an advertiser who presents the highest bid may quickly win enoughadvertising opportunities to deplete its auction budget. However, if theadvertiser's budget is completely depleted, the advertiser may betroubled that its offer was too high, particularly if the return on itsadvertising campaign falls short of its expectations. Second,conversely, an advertiser who presents a relatively low bid but a largebudget may not win any advertising opportunities early in the auctionperiod. Once other advertisers' auction budgets are depleted, theadvertiser may win all the available advertising opportunities at theend of the auction period. However, the low-bidding advertiser may bevery dissatisfied at having failed to win advertising opportunitiesuntil the end of the auction period.

In both of these cases, the advertisers may be dissatisfied and, as aresult, may change their bidding practices. The high-bidding advertisermay bid lower, hoping to stretch its auction budget and win a largernumber of advertisements. However, if the previous high bidder bids toolow, it may win few or no advertising opportunities. On the other hand,the low-bidding advertiser may raise its bid, hoping to win advertisingopportunities earlier in the auction. However, with the previous highbidder lowering its bid, the previous low bidder may find its auctionbudget depleted early during the course of the auction and becomedissatisfied for the same reasons as the previous high bidder. Bothadvertisers may expend a great deal of time and money trying todetermine how to bid, and still be disappointed with their results.

Understandably, the nature of the auction begets a certain amount ofgamesmanship on the part of the advertisers. Because the prices ofadvertising opportunities sold via auction tend to be highly fluid,bidders may submit bids that are less than they are willing to pay inhopes of getting a bargain or, at least, testing the market to determinethe minimum price that they might pay for advertising opportunities. Inother words, the advertisers may not submit truthful bids representativeof what the advertisers believe the advertising opportunities are worth.Instead, the bidders offer bids that are less than what the biddersbelieve the value of the advertising opportunities to be. These bids mayfall below the market price and/or a reserve price set by the seller. Ifa bidder submits a bid price that falls below the selling price, thefunds the bidder committed to the auction budget will be retained by thebidder.

Strategic bidding makes it a challenge for advertising providers to setmarket or reserve prices for advertising opportunities. Even if thesupply of advertising opportunities is known, the actual demand for theadvertising opportunities cannot be ascertained when bidders bid forthose opportunities at levels below what those advertising opportunitiesare worth to them.

SUMMARY

To use market clearing methods to determine market equilibrium, a marketclearing situation is established by determining a number of items to besold at the market price and allotting a number of pseudo itemsassignable to bids below the market price. Once bids are received forthe items, using the number of pseudo items and the actual items as thesupply side, and using the total funds bid as the demand side, a marketclearing price is determinable using a market clearing equilibriummodel, such as a Fisher equilibrium model.

Funds assigned to pseudo items are returned to the bidder or are notcharged. Further, by selling items only for bids exceeding the marketclearing price, such as by setting the market price incrementally abovethe market clearing price, bidders are encouraged to submit bid pricesbid reflecting what the items are worth to them instead of attempting tobid strategically to guess or set the market price.

This Summary is provided to introduce a selection of concepts in asimplified form that are further described below in the DetailedDescription. This Summary is not intended to identify key features oressential features of the claimed subject matter, nor is it intended tobe used as an aid in determining the scope of the claimed subjectmatter.

BRIEF DESCRIPTION OF THE DRAWINGS

The detailed description is described with reference to the accompanyingfigures. In the figures, the left-most digit of a three-digit referencenumber and the left-most two digits of a four-digit reference numberidentify the figure in which the reference number first appears. The useof the same reference numbers in different figures indicates similar oridentical items.

FIGS. 1 and 2 (Prior Art) are screens illustrating results of a searchpresenting a number of ads.

FIG. 3 is a screen representing available advertising opportunities anda logical representation of an unspent money slot.

FIG. 4 is a flow diagram illustrating the logical steps of a process fordetermining a market equilibrium.

FIG. 5 is a flow diagram illustrating the logical steps of a process fordetermining a truth telling market equilibrium in the auctioning ofadvertising opportunities.

FIG. 6 is a web page with which are associated advertising opportunitiesand an unspent money slot representing pseudo items to be assigned tobids below the market clearing price.

FIG. 7 is a set of bids submitted for the advertising opportunities.

FIG. 8 is a web page representing the results of the auction for theadvertising opportunities based on the set of bids of FIG. 7.

FIG. 9 is a second set of bids submitted for the advertisingopportunities.

FIG. 10 is a web page representing the results of the auction for theadvertising opportunities based on the set of bids of FIG. 9.

FIG. 11 is a block diagram of a computing-system environment suitablefor use in determining a truth revealing market equilibrium.

DETAILED DESCRIPTION

Embodiments of methods and systems for determining market equilibriacreate a market clearing situation that enable the use of marketclearing equilibrium models to calculate market equilibria and marketprices. When a market is not cleared, such as when sellers do not sellall the items available for sale and/or the buyers do not spend all themonies they have committed to purchase items, determining marketequilibria is very complicated. Generally, a Walras model, for whichthere are few available algorithms, must be used. Because of theircomplexity, Walras models are computationally intensive, and consumeextensive computing resources.

Creating pseudo commodities that include a number of pseudo items thatcan be “sold” to bids below the market clearing price provides for amarket clearing situation enabling the use of simpler market equilibriumcalculations. The pseudo items are assigned to bidders for funds that,although allocated for the purchase of items, would not be spent. Thefunds assigned to pseudo items are not charged to the bidders or arereturned to the bidders. Nonetheless, the sale of pseudo items clearsthe market, allowing the use of simpler market clearing models, such asFisher equilibrium models, to compute market prices.

In addition, to discourage bidders from strategically bidding to testthe market price, the market price may be set incrementally above themarket clearing price, or items may not be assigned to market pricebids. Because strategic bids will not win items, bidders will beencouraged to submit bids for items that reflect what the items areworth to those bidders rather than attempting to outguess the market.

Employing a Pseudo Commodity to Create a Market Clearing Scenario

FIG. 3 shows a screen 300 from an on-line service provider that sellsadvertising opportunities 302-306. As previously described, the threehighest bidders for the advertising opportunities 302-306 will win theadvertising opportunities 302-306, provided that the highest bidderscontinue to have sufficient funds in their auction budgets to pay forthe advertising opportunities 302-306. Bidders whose bids are lower thanthose who win advertising opportunities 302-306, or whose bids are belowa minimum or reserve price set by the provider of the advertisingopportunity will not be charged.

As previously mentioned, in microeconomics, an appropriate market pricecan be determined from the market equilibrium point where supply equalsdemand. In the exemplary case of auctioning Internet advertisingopportunities, the supply of advertising opportunities can be estimatedwith good accuracy. Using historical data, search engine providers andother providers of advertising opportunities can statistically estimatehow many advertising opportunities they will have to sell. Search engineproviders, in particular, can estimate how many searches are performedon certain days of the week, during certain months or seasons of theyear based on historical, statistical data. Further, by knowing how manysponsored links or other advertising opportunities it can present oneach search results screen, a search engine provider can accuratelyforecast its supply of advertising opportunities.

In a situation where bidders may not submit sufficiently high bids topurchase all the available advertising opportunities, some bidders willretain the funds committed to advertising opportunities. This is anon-market clearing situation. The market is not cleared because not allthe advertising opportunities are sold and/or not all the advertisingfunds were spent.

In a non-market clearing situation, it is relatively difficult todetermine a market equilibrium point. A Walras model, which isunderstood by economists, may be used to determine market equilibrium ina non-market clearing situation. However, application of a Walras modelis very complicated. The Walras model treats all the participants in theauction as both buyers and sellers of items. Considering the case ofbidders seeking to buy advertising opportunities from search engineproviders, the bidders are both buyers of advertising opportunities andsellers of advertising dollars. The search engine providers, on theother hand, are buyers of advertising dollars and sellers of advertisingopportunities. In this model where each participant is both a buyer anda seller, a market equilibrium point may be calculated in a non-marketclearing situation.

However, as is also understood by economists, there are very fewalgorithms available for computing the market equilibrium point using aWalras model. Moreover, those models are highly computationallyintensive and, therefore, consume substantial computing resources indetermining a market equilibrium point.

On the other hand, market equilibrium is much easier to determine in amarket clearing situation where a seller is able to sell all of itsavailable supply of items, and the buyers spend all the funds they haveallocated to acquiring those items. In a market clearing situation, ageneral Fisher equilibrium model can be used to determine marketequilibrium. The Fisher model is simpler to calculate and, thus, muchless computationally intensive. There are a large number of knownalgorithms that may be used to compute market equilibrium using a Fishermodel.

A Fisher model is not applicable in non-market clearing situations, suchas a case when bidders for advertising opportunities do not spend thefunds they committed to advertising opportunities. However, in a mode ofdetermining truth telling market equilibrium, a non-clearing marketsituation is adapted to simulate a market clearing situation, thusallowing for simple computation of market equilibrium using such model.

Referring to FIG. 3, in addition to the advertising opportunitiesrepresented by sponsored links 302-306 that are sold to bidders, avirtual unspent money slot 310 is added to which committed but unspentbidder funds are assigned. The unspent money slot 310 represents apseudo item that neither actually is nor can be sold to bidders. Whenbidders' funds are assigned to the unspent money slot 310, thosebidders' funds are, in effect, spent. In exchange, instead of sellingadvertising opportunities to the bidders whose funds are assigned to theunspent money slot 310, the seller sells these bidders an amount ofmoney equal to their committed but unspent funds. Thus, using theunspent money slot, the seller sells all of its supply, including bothavailable advertising opportunities 302-306, and monies assigned to theunspent money slot. The bidders similarly expend all their funds, eitherby buying advertising opportunities 302-306 or by spending theircommitted funds on the unspent money slot 310.

It is an artifice to add the unspent money slot 310 to the items beingsold when monies assigned to the unspent money slot 310 are eitherreturned to or never charged to the bidders. Nonetheless, use of theunspent money slot 310 facilitates computation of market equilibrium toallow the seller to set prices using a simple, market clearing situationmodel such as a Fisher equilibrium model.

Market Equilibrium Determination Process

FIG. 4 is a flow diagram of one mode of a process 400 is used todetermine market equilibrium. At 402, a number of items to be sold isdetermined. The number of items may be known, such as by determining anumber of goods in inventory. Alternatively, the number of items may beestimated or projected.

At 404, a pseudo commodity is added that will be assigned to bids belowmarket price. At 406, bids for the items to be sold are received. In thecase of an auction for advertising opportunities or any auction wherebidders may seek to acquire multiple goods, each bid includes a bidprice and an auction budget. The bid price specifies the maximum priceeach bidder is willing to pay for a single item. The auction budgetspecifies a total sum the bidder is willing to spend on items to be soldduring the auction.

At 408, an appropriate market price is determined. The market price iscalculated with a supply side including the number of items to be soldand the number of pseudo items and a demand side including the receivedbids. The number of pseudo items needed to effect a market clearingsituation is determinable from the number of items and the number ofbids. The number of pseudo items included in the pseudo commodity is setso that the price of each pseudo item is equal to the price that will bepaid for each pseudo item in a market clearing equilibrium. In one mode,a binary search algorithm is used to determine the appropriate number ofpseudo items needed so that the price of each pseudo item is equivalentto the bid that will be assigned to each of the pseudo items.

With the appropriate number of pseudo items available to be assigned toeach of the bids, a market clearing situation is created because theseller sells every item available for sale (including the needed numberof pseudo items) and each buyer spends all of its available funds. Themarket clearing situation is simulated, because the pseudo items are notreal items, and buyers' funds assigned to those items are either notcharged to the buyers or are refunded to the buyers. Nonetheless, bycreating the pseudo commodity and selling the pseudo items, a marketclearing equilibrium model, such as a Fisher equilibrium model, can beused to determine market prices.

At 410, items are assigned to bids submitting bids that meet or exceedthe market price determined at 408. At 412, on the other hand, pseudoitems are assigned to the remaining bids that do not meet the marketprice. At 414, the bids assigned to pseudo items at 414 are released tothe bidder submitting them. If the funds assigned to the pseudo itemswere charged to the bidder, the funds are returned directly to thebidder or are restored to an account under the bidder's control.Alternatively, if the funds committed by the bidder were not charged tothe bidder, those funds will not be collected from the bidder.

In sum, a mode of determining market equilibrium as exemplified in FIG.4 simulates a market clearing situation. Thus, a market price can bedetermined much more simply using a Fisher equilibrium model or similarmodel than by using a Walras model or other model that would have to beused in a non-market clearing situation.

Market Equilibrium Determination in an Advertising Opportunity Auction

FIG. 5 is a flow diagram of one mode of a process 500 is used todetermine market equilibrium in an auction of advertising opportunities.At 502, a number of available advertising opportunities to be sold isdetermined. An advertising provider can accurately estimate the numberof available advertising opportunities expected to become availableduring a particular auction period. Considering the example of a searchengine provider, the provider knows how many advertising spaces areavailable per page. Further, the provider can access historical data todetermine how many searches have included the search terms in whichadvertisers will be interested. Providers who maintain records ofsearches conducted on particular days within particular months and/orseasons can project how many similar searches can be expected on asimilar day in the future, and even at particular times on those days.Each of the searches will yield a results page including a known numberof advertising opportunities. Thus, combining the number of searcheswith the known number of advertising opportunities associated with eachsearch, an advertising provider can determine the number of advertisingopportunities available to be auctioned or otherwise sold during afuture period.

At 504, a pseudo commodity is added in the form of an unspent money slot310 (FIG. 3). The unspent money slot 310, as is described further below,encompasses a number of pseudo advertising opportunities that will beassigned to each of the bids below the market price. At 506, bids forthe advertising opportunities are received. In the case of an auctionfor advertising opportunities, each bid includes a bid price and anauction budget. The bid price specifies the maximum price each bidder iswilling to pay for a single item. The auction budget specifies a totalsum the bidder is willing to spend on items to be sold during theauction.

At 508, an appropriate market price is determined. The market price iscalculated. In determining the market price, the supply side includesthe number of advertising opportunities to be sold and the number ofpseudo advertising opportunities included in the unspent money slot. Thedemand side is represented by the bid prices and the auction budgetswithin the received bids. The number of pseudo advertising opportunitiesneeded to effect a market clearing situation is determinable from thenumber of advertising opportunities and the bids received as previouslydescribed.

At 510, in one mode of a facilitating a truth telling equilibrium, themarket price is set at the market clearing price determined at 508, orthe market price may be set slightly above the market clearing price. Ina Vickery-type auction, for example, a second-highest bidder effectivelysets the market price. When a bidder can set the market price, theauction is subject to undesirable gamesmanship and strategic bidding. Itis desirable for bidders to bid what they believe the items on whichthey are bidding are worth. According to modes of market equilibriumdetermination, bidders are encouraged to bid what they believe items areworth because the bidders who submit a sufficient bid will win items,while others will not be charged. To enhance this result, bidders whobid exactly what is determined to be the market clearing price will nothave items assigned to them. In other words, the market price is setjust above the market clearing price.

Not assigning items to bidders that bid the market price encouragesbidders to bid truthfully to what they believe the items are worth,rather than bidding at the level they believe to be the market price.Because bidding the market price will not win items for bidders making amarket price bid, bidders are discouraged from attempting tostrategically identify and bid the market price, but are encouraged tobid what they subjectively believe the items to be worth.

At 512, advertising opportunities are assigned to bids that meet orexceed the market price determined at 510. At 514, a matching polytypeor assignment polytype is applied to ensure that the same bidder is notassigned more than one advertising opportunity on each page. A doublestochastic matrix also may be used to prevent undesirable assignments ofmultiple advertising opportunities per page. At 516, the bids that werebelow the market price are assigned to pseudo items associated with theunspent money slot. Again, as previously described, a binary searchalgorithm or similar process is employed to ensure that there existenough pseudo items to be assigned to below market price bids to effecta market clearing situation.

At 518, the advertisements associated with the bidders that have beenassigned advertising opportunities are presented on web pages generatedby the advertising provider. At 520, monies assigned pseudo items at 414are released to the bidder submitting them. As previously described, ifthe funds assigned to the pseudo items were charged to the bidder, thefunds are returned directly to the bidder or are restored to an accountunder the biddet's control. Alternatively, if the funds committed by thebidder were not charged to the bidder, those funds will not be collectedfrom the bidder.

Determination of Market Clearing Price

As previously described, inclusion of pseudo items to which below marketprice bids are assigned facilitates calculation of the market priceusing a market clearing algorithm. Such a process is understood by thoseskilled in analysis and determination of market equilibria. Nonetheless,the nature of this determination is further described for sake ofexample.

In the case of auctioning advertising opportunities as previouslydescribed, it is projected that N web pages including advertisingopportunities will be generated during the auction period, with each ofthe N web pages including k advertising opportunities. Each of theadvertising opportunities is denoted by j for j=1 to k. Each of the kadvertising opportunities, independent of a likelihood the advertisementinserted therein presents of being selected, has an inherent likelihoodof being selected by a user of α_(j).

Bidding for the advertising opportunities are l bidders, each of whichsubmits a bid of b_(i) and an auction budget of B_(i). Theadvertisements presented by each of the l bidders has an inherentlikelihood of being selected, independent of the likelihood of theadvertising opportunity in which the advertisement is presented of beingselected, of β_(i). for i=1 to l. Thus, the likelihood of anadvertisement in a particular advertising opportunity being selected isα_(j) β_(i).

According to one exemplary mode, to facilitate determination of a marketclearing equilibrium, an additional commodity is added to representpseudo items, such as pseudo advertising opportunities in an unspentmoney slot. Thus, where there are k advertising opportunities for sale,the pseudo opportunity represents the (k+1)th item to be sold. Tofurther facilitate the determination; (k+1) pseudo bidders are includedin the market, each of which submits a bid price equal to the reserveprice of the advertising opportunities and an auction budget equal tothe product of the number of web pages N and the reserve price.

As a result, the utility for each of the bidders in winning one of theadvertising opportunities is given by Eq. (1):U_(ij)=b_(i)α_(j)β_(i)  (1)The utility of each of the bidders to receive its money back byacquiring a pseudo item is given by Eq. (2):U_(k+1)=1  (2)A constraint is added as represented by Eq. (3): $\begin{matrix}{{\sum\limits_{j = 1}^{k}{x_{ij}\alpha_{j}}} \leq L_{i}} & (3)\end{matrix}$In Eq. (3), x_(ij) represents a portion of each of the advertisingopportunities j won by bidder i, and for each bidder L_(i) is chosensuch that L₁≧L₂≧ . . . ≧L_(l), and L_(i)≦α_(i)for 1≦i≦ min(k, l), andL_(i)=1 for each of the pseudo bidders 1 through k+l. Using theseequations, all the items are sold, all budgets are exhausted, and binarysearch or a similar algorithm is used to calculate a number of pseudoitems needed for the price of each to be equal to 1. As a result, themarket clearing equilibrium situation is solvable to determine themarket clearing price.

However, as previously stated, using an additional commodity torepresent the pseudo items and introducing a number of pseudo bidders,is only manner by which a market clearing equilibrium scenario may bedetermined. Other processes, such as those wherein a selection of L_(i)will result in a matching polytype in which in matching polytope inwhich all the items are sold and all the budgets are exhausted, also aresuitable for determining a market clearing equilibrium.

Examples of Determining Market Equilibria for Advertising Opportunities

FIGS. 6-10 are used to illustrate two examples of the determination ofmarket clearing equilibria. Each of the equilibria is calculated in theexemplary context of auctioning advertising opportunities presentable ona web page 600. Specifically, web page 600 includes a first advertisingopportunity 602 and a second advertising opportunity 604. For sake ofexample, it is assumed that the first advertising opportunity 602 has alikelihood of selection 606 of 100 percent such that, each time the webpage 600 is presented, the first advertising opportunity 602 is alwaysselected. The second advertising opportunity 604 has a likelihood ofselection 608 of 50 percent such that the second advertising opportunity604 is selected half the time the web page 600 is presented. An unspentmoney slot 610 is associated with the web page 600 to capture moniescommitted to the auction by bidders who submit bids that are less thanthe market price. Over the course of the auction period, based onhistorical and/or projected data, the web page 600 is estimated to bepresented 100 times 612.

FIG. 7 shows a set of bids 700 offered by three bidders, Bidder A 710,Bidder B 720, and Bidder C 730. Bidder A 710 submits a bid price of$2.00 per selection 712 and an auction budget of $65.00 714. Bidder B720 submits a bid price of $1.00 per selection 722 and an auction budgetof $75.00 724. Bidder C 730 submits a bid price of $0.50 per selection732 and an auction budget of $10.00 734.

In this three-bidder, two-item auction, the market clearing price isdeterminable by determining the aggregate supply and demand. In the 100projected pages 612 (FIG. 6), the first advertising opportunity 602 isalways selected for a total of 100 advertising opportunities resultingfrom the first advertising opportunity 602. The second advertisingopportunity 604 is selected half of the times it is presented for anadditional 50 advertising opportunities resulting from the secondadvertising opportunity 604. Thus, the total number of advertisingopportunities representing the supply side is 150. The auction budgetsof $65.00 414, $75.00 724, and $10.00 734 total $150 to determine thedemand side. Accordingly, the market clearing price for each advertisingopportunity is described by Eq. (4): $\begin{matrix}{{{Market}\quad{clearing}\quad{price}} = {\frac{{Total}\quad{Demand}}{{Total}{\quad\quad}{Supply}} = {\frac{\$ 140}{150} = {{\$ 0}{.93}}}}} & (4)\end{matrix}$Because Bidder A's bid 712 and Bidder B's bid 722 both exceed the marketclearing price, Bidder A 710 and Bidder B 720 both will win items.

FIG. 8 shows a web page 800 graphically depicting the results of theauction. Using a matching or assignment polytope, the first advertisingopportunity 802 will be assigned to Bidder A for 50 percent of itsimpressions 810 and to Bidder B for the other 50 percent of itsimpressions 812. Similarly, the second advertising opportunity 804 willbe assigned to Bidder A for 50 percent of its impressions 814 and toBidder B for the other 50 percent of its impressions 816. Because BidderC's bid price 732 (FIG. 7) of $0.50 is below the market clearing price,all funds 818 of Bidder C's auction budget 734 is assigned to theunspent money slot 820. The market is cleared because all of theseller's advertising opportunities are sold and all the buyers havespent all the funds each has committed to the auction. Granted, BidderC's auction budget 734 is spent on pseudo items in the unspent moneyslot 820 and those funds will be returned or never charged to Bidder C.Nonetheless, the artifice permits a market clearing algorithm to be usedto calculate market clearing price.

For a second example, FIG. 9 shows a second set of bids 900 offered bythree bidders, Bidder A 910, Bidder B 920, and Bidder C 930. Bidder A910 once again submits a bid price of $2.00 per selection 912, but thistime submits an auction budget of $75.00 914. As in the example of FIG.7, Bidder B 920 submits a bid price of $1.00 per selection 922 and anauction budget of $75.00 924, and Bidder C 930 submits a bid price of$0.50 per selection 932 and an auction budget of $10.00 934. The supplyside as illustrated in FIG. 6 remains the same. By comparison with theexample of FIG. 7, The total demand increases by $10 because Bidder A910 increased its auction budget from $65.00 714 to $75.00 914. Thus,the market clearing price can be determined using Eq. (5):$\begin{matrix}{{{Market}\quad{clearing}\quad{price}} = {\frac{{Total}{\quad\quad}{Demand}}{{Total}\quad{Supply}} = {\frac{\$ 150}{150} = {{\$ 1}{.00}}}}} & (5)\end{matrix}$

As previously described, in facilitating determination of a truthtelling market equilibrium, it may be desirable to set the market priceincrementally above the market clearing price to discourage bidders fromattempting to strategically bid the market price. Thus, because BidderB's bid 922 of $1.00 is at the market clearing price, Bidder B 920 willnot be assigned advertising opportunities.

FIG. 10 shows a web page 1000 presenting the first advertisingopportunity 1002, the second opportunity 1004, and an unspent money slot1006. At a market price just over the market clearing price of $1.00 asdetermined in Eq. (5), on 50 percent 1010 of the presentations of theweb page 1000, the first advertising opportunity 1002 is assigned toBidder A, and on the other 50 percent 1012 of the presentations of theweb page 1000, the second advertising opportunity 1004 is assigned toBidder A. Thus, half of the total advertising opportunities remainunassigned. All funds 1014 of Bidder B's budget and all funds 1016 ofBidder C's budget are assigned to the unspent money slot 1006. In onemode of determining truth telling market equilibria, it is preferable tohave unsold items, as shown in FIG. 10, rather than accept market pricebids that may encourage strategic bidding or sway the market.

Computing System for Implementing Exemplary Embodiments

FIG. 11 illustrates an exemplary computing system 1100 for implementingembodiments of the market equilibrium determination process illustratedby example in the foregoing description. The computing system 1100 isonly one example of a suitable operating environment and is not intendedto suggest any limitation as to the scope of use or functionality ofexemplary embodiments of the market equilibrium determination processpreviously described or other embodiments. Neither should the computingsystem 1100 be interpreted as having any dependency or requirementrelating to any one or combination of components illustrated in theexemplary computing system 1100.

The market equilibrium determination process may be described in thegeneral context of computer-executable instructions, such as programmodules, being executed on computing system 1100. Generally, programmodules include routines, programs, objects, components, datastructures, etc., that perform particular tasks or implement particularabstract data types. Moreover, those skilled in the art will appreciatethat the market equilibrium determination process may be practiced witha variety of computer-system configurations, including hand-helddevices, multiprocessor systems, microprocessor-based orprogrammable-consumer electronics, minicomputers, mainframe computers,and the like. The market equilibrium determination process may also bepracticed in distributed-computing environments where tasks areperformed by remote-processing devices that are linked through acommunications network. In a distributed-computing environment, programmodules may be located in both local and remote computer-storage mediaincluding memory-storage devices.

With reference to FIG. 11, an exemplary computing system 1100 forimplementing the market equilibrium determination process includes acomputer 1110 including a processing unit 1120, a system memory 1130,and a system bus 1121 that couples various system components includingthe system memory 1130 to the processing unit 1120.

Computer 1110 typically includes a variety of computer-readable media.By way of example, and not limitation, computer-readable media maycomprise computer-storage media and communication media. Examples ofcomputer-storage media include, but are not limited to, Random AccessMemory (RAM); Read Only Memory (ROM); Electronically ErasableProgrammable Read Only Memory (EEPROM); flash memory or other memorytechnology; CD ROM, digital versatile discs (DVD) or other optical orholographic disc storage; magnetic cassettes, magnetic tape, magneticdisk storage or other magnetic storage devices; or any other medium thatcan be used to store desired information and be accessed by computer1110. The system memory 1130 includes computer-storage media in the formof volatile and/or nonvolatile memory such as ROM 1131 and RAM 1132. ABasic Input/Output System 1133 (BIOS), containing the basic routinesthat help to transfer information between elements within computer 1110(such as during start-up) is typically stored in ROM 1131. RAM 1132typically contains data and/or program modules that are immediatelyaccessible to and/or presently being operated on by processing unit1120. By way of example, and not limitation, FIG. 11 illustratesoperating system 1134, application programs 1135, other program modules1136, and program data 1137.

The computer 1110 may also include other removable/nonremovable,volatile/nonvolatile computer-storage media. By way of example only,FIG. 11 illustrates a hard disk drive 1141 that reads from or writes tononremovable, nonvolatile magnetic media, a magnetic disk drive 1151that reads from or writes to a removable, nonvolatile magnetic disk1152, and an optical-disc drive 1155 that reads from or writes to aremovable, nonvolatile optical disc 1156 such as a CD-ROM or otheroptical media. Other removable/nonremovable, volatile/nonvolatilecomputer-storage media that can be used in the exemplary operatingenvironment include, but are not limited to, magnetic tape cassettes,flash memory units, digital versatile discs, digital video tape, solidstate RAM, solid state ROM, and the like. The hard disk drive 1141 istypically connected to the system bus 1121 through a nonremovable memoryinterface such as interface 1140. Magnetic disk drive 1151 and opticaldick drive 1155 are typically connected to the system bus 1121 by aremovable memory interface, such as interface 1150.

The drives and their associated computer-storage media discussed aboveand illustrated in FIG. 11 provide storage of computer-readableinstructions, data structures, program modules and other data forcomputer 1110. For example, hard disk drive 1141 is illustrated asstoring operating system 1144, application programs 1145, other programmodules 1146, and program data 1147. Note that these components caneither be the same as or different from operating system 1134,application programs 1135, other program modules 1136, and program data1137. Typically, the operating system, application programs, and thelike that are stored in RAM are portions of the corresponding systems,programs, or data read from hard disk drive 1141, the portions varyingin size and scope depending on the functions desired. Operating system1144, application programs 1145, other program modules 1146, and programdata 1147 are given different numbers here to illustrate that, at aminimum, they can be different copies. A user may enter commands andinformation into the computer 1110 through input devices such as akeyboard 1162; pointing device 1161, commonly referred to as a mouse,trackball or touch pad; a wireless-input-reception component 1163; or awireless source such as a remote control. Other input devices (notshown) may include a microphone, joystick, game pad, satellite dish,scanner, or the like. These and other input devices are often connectedto the processing unit 1120 through a user-input interface 1160 that iscoupled to the system bus 1121 but may be connected by other interfaceand bus structures, such as a parallel port, game port, IEEE 1394 port,or a universal serial bus (USB) 1198, or infrared (IR) bus 1199. Aspreviously mentioned, input/output functions can be facilitated in adistributed manner via a communications network.

A display device 1191 is also connected to the system bus 1121 via aninterface, such as a video interface 1190. Display device 1191 can beany device to display the output of computer 1110 not limited to amonitor, an LCD screen, a TFT screen, a flat-panel display, aconventional television, or screen projector. In addition to the displaydevice 1191, computers may also include other peripheral output devicessuch as speakers 1197 and printer 1196, which may be connected throughan output peripheral interface 1195.

The computer 1110 will operate in a networked environment using logicalconnections to one or more remote computers, such as a remote computer1180. The remote computer 1180 may be a personal computer, and.typically includes many or all of the elements described above relativeto the computer 1110, although only a memory storage device 1181 hasbeen illustrated in FIG. 11. The logical connections depicted in FIG. 11include a local-area network (LAN) 1171 and a wide-area network (WAN)1173 but may also include other networks, such as connections to ametropolitan-area network (MAN), intranet, or the Internet.

When used in a LAN networking environment, the computer 1110 isconnected to the LAN 1171 through a network interface or adapter 1170.When used in a WAN networking environment, the computer 1110 typicallyincludes a modem 1172 or other means for establishing communicationsover the WAN 1173, such as the Internet. The modem 1172, which may beinternal or external, may be connected to the system bus 1121 via thenetwork interface 1170, or other appropriate mechanism. Modem 1172 couldbe a cable modem, DSL modem, or other broadband device. In a networkedenvironment, program modules depicted relative to the computer 1110, orportions thereof, may be stored in the remote memory storage device. Byway of example, and not limitation, FIG. 11 illustrates remoteapplication programs 1185 as residing on memory device 1181. It will beappreciated that the network connections shown are exemplary, and othermeans of establishing a communications link between the computers may beused.

Although many other internal components of the computer 1110 are notshown, those of ordinary skill in the art will appreciate that suchcomponents and the interconnections are well-known. For example,including various expansion cards such as television-tuner cards andnetwork-interface cards within a computer 1110 is conventional.Accordingly, additional details concerning the internal construction ofthe computer 1110 need not be disclosed in describing exemplaryembodiments of the market equilibrium determination process.

When the computer 1110 is turned on or reset, the BIOS 1133, which isstored in ROM 1131, instructs the processing unit 1120 to load theoperating system, or necessary portion thereof, from the hard disk drive1141 into the RAM 1132. Once the copied portion of the operating system,designated as operating system 1144, is loaded into RAM 1132, theprocessing unit 1120 executes the operating system code and causes thevisual elements associated with the user interface of the operatingsystem 1134 to be displayed on the display device 1191. Typically, whenan application program 1145 is opened by a user, the program code andrelevant data are read from the hard disk drive 1141 and the necessaryportions are copied into RAM 1132, the copied portion represented hereinby reference numeral 1135.

CONCLUSION

Although exemplary embodiments have been described in language specificto structural features and/or methodological acts, it is to beunderstood that the appended claims are not necessarily limited to thespecific features or acts previously described. Rather, the specificfeatures and acts are disclosed as exemplary embodiments.

1. A method performable by a computing system for setting a marketprice, the method comprising: determining a number of items to be soldat the market price; creating a pseudo commodity including a number ofpseudo items assignable to bids below the market price; receiving aplurality of bids for the items; and using the number of items to besold and the number of pseudo items as a supply side and the pluralityof bids as the demand side, determining a market clearing price usablein setting the market price.
 2. A method of claim 1, wherein the numberof items to be sold represents an estimated number of items is derivedfrom at least one of: a known number of items available to be sold; abody of historical data representing an actual number of items sold; anda projection of a number of items to be sold.
 3. A method of claim 1,further comprising: setting the market price to one of equal to orgreater than the market clearing price; assigning each of the number ofitems to each of the bids at least equivalent to the market price;assigning each of the number of pseudo items to each of bids less thanthe market price; and one of not charging and refunding each of aplurality of bidders submitting each of the bids to which each of thenumber of pseudo items is assigned.
 4. A method of claim 3, furthercomprising determining the number of pseudo items such that a price ofeach of the pseudo items is equivalent to each of the bids to which eachof the pseudo items is assigned.
 5. A method of claim 4, wherein thenumber of pseudo items is determined using a binary search algorithm. 6.A method of claim 1, wherein the market price is being set for anauction wherein: the auction includes a number of rounds where thenumber of items to be sold and the number of pseudo items of the pseudocommodity are available for sale during each of the number of rounds;and each of the plurality of bids includes a bid price and an auctionbudget.
 7. A method of claim 6, wherein the plurality of bids includes:a plurality of actual bids received from a number of actual bidders; anda plurality of pseudo bids from a number of pseudo bidders, where: anumber of pseudo bidders is equal to the number of items plus one torepresent the pseudo commodity; and each of the pseudo bids includes apseudo bid price and a pseudo auction budget equal to a product of thereserve price and the number of rounds.
 8. A method of claim 7, whereineach of the items includes an advertising opportunity in which aselectable advertisement is presentable, wherein: the advertisingopportunity is associated with a first likelihood of the advertisingopportunity being selected; the selectable advertisement is associatedwith a second likelihood of the advertisement being selected, the secondlikelihood including: for each of the advertisements associated withactual bids, the second likelihood includes one of an estimated and ameasured likelihood; and for each of the pseudo bids, the secondlikelihood is set to one; and the market clearing price is determined bymaximizing a utility of each of the actual bidders and the pseudobidders where the utility is the product of the bid price, the firstlikelihood, and the second likelihood.
 9. A method of claim 8, furthercomprising ensuring that only a single advertisement for a single bidderis presented on a single screen using one of: a matching polytope; anassignment polytope; and a double stochastic matrix.
 10. A method ofclaim 1, wherein the market clearing price is determined using a Fisherequilibrium model.
 11. A computer-readable medium havingcomputer-useable instructions embodied thereon for executing the methodof claim
 1. 12. A method performable by a computing system for setting amarket price for an auction of a number of advertising opportunities,each of the advertising opportunities being presentable on a number ofpages and operable to present a selectable advertisement, comprising:creating an unspent money slot including a number of pseudo itemsassignable to bids below the market price; receiving a plurality of bidsfor the advertising opportunities, each of the bids including a bidprice and an auction budget; using the number of advertisingopportunities and the number of pseudo items as a supply side and theplurality of bids as the demand side, determining a market clearingprice usable in setting the market price; setting the market price toone of the market clearing price and a value greater than the marketclearing price; assigning each of the number of advertisingopportunities to each of the bids at least equivalent to the marketprice; assigning each of the number of pseudo items to each of bids lessthan the market price; and one of not charging and refunding each of aplurality of bidders submitting each of the bids to which each of thenumber of pseudo items is assigned.
 13. A method of claim 12, whereinthe number of advertising opportunities to be sold represents anestimated number of advertising opportunities derived from at least oneof: a known number of advertising opportunities available to be sold; abody of historical data representing an actual number of advertisingopportunities sold; and a projection of a number of advertisingopportunities to be sold.
 14. A method of claim 12, furthercomprising-determining the number of pseudo items such that a price ofeach of the pseudo items is equivalent to each of the bids to which eachof the pseudo items is assigned.
 15. A method of claim 14, wherein thenumber of pseudo items is determined using a binary search algorithm.16. A method of claim 12, wherein the plurality of bids includes: aplurality of actual bids received from a number of actual bidders; and aplurality of pseudo bids from a number of pseudo bidders, where: anumber of pseudo bidders is equal to the number of items plus one torepresent the pseudo commodity; and each of the pseudo bids includes abid price and an auction budget equal to a product of the reserve priceand the number of rounds.
 17. A method of claim 16, further comprising:associating with each of the advertising opportunities a firstlikelihood of being selected; associating with each of the selectableadvertisement is associated with a second likelihood of theadvertisement being selected independent of the advertising opportunityin which the selectable advertisement is presented, the secondlikelihood including: for each of the advertisements associated withactual bids, the second likelihood includes one of an estimated and ameasured likelihood; and for each of the pseudo bids, the secondlikelihood is set to one; and the market clearing price is determined bymaximizing a utility of each of the actual bidders and the pseudobidders where the utility is the product of the bid price, the firstlikelihood, and the second likelihood.
 18. A method of claim 17, furthercomprising ensuring that only a single advertisement for a single bidderis presented on a single screen using one of: a matching polytope; anassignment polytope; and a double stochastic matrix.
 19. A method ofclaim 12, wherein the market clearing price is determined using a Fisherequilibrium model.
 20. A system for setting a market price, the systemcomprising one or more computers programmed to perform actionscomprising: determining a number of items to be sold at the marketprice; creating a pseudo commodity including a number of pseudo itemsassignable to bids below the market price; receiving a plurality of bidsfor the items; using the number of items to be sold and the number ofpseudo items as a supply side and the plurality of bids as the demandside, determining a market clearing price usable in setting the marketprice; setting the market price to one of equal to or greater than themarket clearing price; assigning each of the number of items to each ofthe bids at least equivalent to the market price; assigning each of thenumber of pseudo items to each of bids less than the market price; andone of not charging and refunding each of a plurality of bidderssubmitting each of the bids to which each of the number of pseudo itemsis assigned.